One of Varic Company’s products goes through a glazing process. The company has observed glazing costs as follows over the last six weeks:
Week Units Produced Total Glazing Cost
1 8 270
2 5 200
3 10 310
4 4 190
5 6 240
6 9 290
For planning purposes, the company’s management wants to know the amount of variable glazing cost per unit and the total fixed glazing cost per week.
1. Using the High - low method, estimate the variable and fixed elements of the glazing cost.
2. Express the cost data in (1) above in the form Y = a + bX.
3. If the company processes seven units next week, what would be the expected total glazing cost?